LONDON, April 7 (Reuters) - The world's first clinical trial designed to explore using a hallucinogen from magic mushrooms to treat people with depression has stalled because of British and European rules on the use of illegal drugs in research.

David Nutt, president of the British Neuroscience Association and professor of neuropsychopharmacology at Imperial College London, said he had been granted an ethical green light and funding for the trial, but regulations were blocking it.

"We live in a world of insanity in terms of regulating drugs," he told a neuroscience conference in London on Sunday.

He has previously conducted small experiments on healthy volunteers and found that psilocybin, the psychedelic ingredient in magic mushrooms, has the potential to alleviate severe forms of depression in people who don't respond to other treatments.

Following these promising early results he was awarded a 550,000 pounds (${esc.dollar}844,000) grant from the UK's Medical Research Council to conduct a full clinical trial in patients.

But psilocybin is illegal in Britain, and under the United Nations 1971 Convention on Psychotropic Substances it is classified as a Schedule 1 drug - one that has a high potential for abuse and no recognised medical use.

This, Nutt explained, means scientists need a special licence to use magic mushrooms for trials in Britain, and the manufacture of a synthetic form of psilocybin for use in patients is tightly controlled by European Union regulations.

Together, this has meant he has so far been unable to find a company able to make and supply the drug for his trial, he said.

"Finding companies who could manufacture the drug and who are prepared to go through the regulatory hoops to get the licence, which can take up to a year and triple the price, is proving very difficult," he said.

Nutt said regulatory authorities have a "primitive, old-fashioned attitude that Schedule 1 drugs could never have therapeutic potential", despite the fact that his research and the work done by other teams suggests such drugs may help treat some patients with psychiatric disorders.

Psilocybin - or "magic" - mushrooms grow naturally around the world and have been widely used since ancient times for religious rites and also for recreation.

Researchers in the United States have seen positive results in trials using MDMA, a pure form of the party drug ecstasy, in treating post-traumatic stress disorder.

"What we are trying to do is to tap into the reservoir of under-researched illegal drugs to see if we can find new and beneficial uses for them in people whose lives are often severely affected by illnesses such as depression," Nutt said.

The proposed trial would involve 60 patients with depression who have failed two previous treatments.

During two or three controlled sessions with a therapist, half would be given a synthetic form of psilocybin, and the other 30 a placebo. They would have guided talking therapy to explore negative thinking and issues troubling them, and doctors would follow them up for at least a year.

Nutt secured ethical approval for the trial in March.

In previous research, Nutt found that when healthy volunteers were injected with psilocybin, the drug switched off a part of the brain called the anterior cingulate cortex, which is known to be overactive in people with depression.

"Even in normal people, the more that part of the brain was switched off under the influence of the drug, the better they felt two weeks later. So there was a relationship between that transient switching off of the brain circuit and their subsequent mood,", he said. "This is the basis on which we want to run the trial." (${esc.dollar}1 = 0.6514 British pounds)

(Reporting by Kate Kelland, editing by Richard Meares)

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